Every child at infant school in England will receive free lunches from next September, Nick Clegg will announce on Wednesday in a £1.2bn coalition deal that will allow the Tories to introduce a marriage tax allowance by the end of the year.

As the Liberal Democrats step up their campaign to draw up sharp differences with their coalition partners, the deputy prime minister will contrast his support for free school meals with Tory demands for the marriage tax allowance.

In his closing speech to the Lib Dem conference, after winning a series of crunch votes, a newly emboldened Clegg will make clear that the £600m-a-year scheme was the price he had demanded to support David Cameron's tax scheme.

George Osborne will announce plans for the marriage tax allowance, which will cost a similar sum, in his autumn statement this year. The Lib Dems will abide by their commitment in the coalition agreement to abstain in a Commons vote introducing the allowance, allowing it to pass.

The deputy prime minister will contrast the values of the Lib Dems – who pressed for the provision of free school meals for an extra 1.5 million children – with those of the Tories.

Hailing the scheme, which will save parents £437 a year and reintroduce the concept of universal benefits at a time of austerity, Clegg will say: "The Conservatives have made it clear that their priority is to help some families over others, with a tax break for married couples – a tax break for some, funded through the taxes of others. That tells you everything you need to know about their values.

"We, however, will help all families in these tough times – not just the kind we like best – by helping their young children get the best possible start in life. And that tells you everything about ours."

The announcement was the result of a direct deal between Cameron and Clegg. The Tories were interested in the idea of free school meals, which were suggested in the School Food Plan commissioned by Michael Gove. But the extra spending was not a priority for Cameron, who announced in summer that the marriage tax allowance would be introduced this year.

A senior Lib Dem source said: "They want to spend roughly the same amount on the marriage tax. We want to spend it on this. It is a straight-up-and-down deal."

The Lib Dem move means that an extra 1.5 million children aged between five and seven will be entitled to free school meals. This will take to 1.9 million the number of infant school pupils eligible for the meals – 400,000 children, whose parents are on low incomes, already qualify.

Clegg's decision to highlight the nature of coalition deals – and what they say about the contrasting values of the two parties – shows how he is determined to highlight Lib Dem achievements and to draw dividing lines with the Tories. He will deliver his fourth conference speech as deputy prime minister after a week in Glasgow in which he saw off challenges from the left on tax policy, Trident, deficit reduction and nuclear power. Ministers joked about their one "loss" – the vote denouncing the bedroom tax. "We didn't make much of an effort on that one for obvious reason because most of us agreed with the motion," one said.

Clegg will argue he is determined to stake out the middle ground of British politics – and to remain neutral over the Lib Dems' choice of coalition partner – when he depicts the party's role as a restraining influence on the two main parties.

In a sign that he is keener than ever to stay on in government after the election, he will say: "The country is finally emerging from the biggest economic crisis in living memory. The absolute worse thing to do would be to give the keys to No 10 to a single-party government – Labour or the Conservatives … Labour would wreck the recovery. The Conservatives would give us the wrong kind of recovery. Only the Liberal Democrats can finish the job and finish it in a way that is fair." Clegg, who will give a personal account of his privileged background and of his family's role in turbulent twentieth century continental Europe, will declare that the Lib Dems are "not some subset" of the larger parties and will say: "We're no one's little brother."

Clegg regards the free school meals announcement as one of the most significant since he entered government. In their School Food Plan this year the Leon Restaurants founders, Henry Dimbleby and John Vincent, supported universal free school meals for primary school children after citing research finding that it had educational benefits in addition to nutritional advantages.

The study under the last government in three boroughs, Durham, Newham and Wolverhampton, found academic benefits that outstripped those from the introduction of the literacy hour.

The Clegg proposal received widespread praise from children's groups and teaching unions. But two rightwing thinktanks, the Institute of Economic Affairs and the Centre for Policy Studies, criticised it. Ryan Bourne, of the CPS, said: "There was me thinking we had huge public borrowing. The poorest children are already eligible for free school meals – the main beneficiaries of this new universal benefit will be middle and upper income households, who really don't need a public subsidy. I thought that with the huge deficit, ageing population and productivity pressures in the public sector, it was becoming acknowledged that universal benefits were unsustainable."